184. In December 1973, one year after taking office, the Whitlam Labor government introduced a referendum to legalise government controls over wages and prices. This was an attempt to meet the insistence, on the part of powerful sections of the bourgeoisie, that workers’ wage demands be suppressed and industrial stability restored following the defeat of the penal powers and collapse of the post-war industrial relations regime. Inflation was on the rise in the wake of the demise of the Bretton Woods monetary system in August 1971, and workers were determined to press ahead with their demands. The referendum was overwhelmingly defeated, signalling the start of a wages offensive by the working class over the next 12 months.
185. A rising tide of industrial struggle ensued. In 1972, 2 million working days were lost as a result of strikes; in 1973, 2.6 million and in 1974, almost 6.3 million, the most since the industrial and political turmoil of 1919. Wage claims leapfrogged as workers won first $15, then $24 and even $30 and $40 per week increases. In 1973, the inflation rate was 13.2 percent, while the average wage increased by 21 percent. In 1974, adult male earnings increased by 28 percent, with prices rising by 16.3 percent.
186. The movement in Australia was part of an international upheaval. In February 1974, the British miners brought down the Heath Tory government. In the United States the political crisis produced by the Vietnam War saw the collapse of the Nixon administration. In Portugal, the movement of the working class and the liberation struggles in the colonies resulted in the collapse of the fascist regime that had held power for 50 years. In South East Asia, US imperialism was being defeated in Vietnam, Marcos had been forced to introduce martial law in the Philippines and the US-backed Suharto regime in Indonesia faced destabilisation with the collapse of Portuguese rule in East Timor.
187. The election of a Labor government posed complex political issues before the SLL, just eight months after its founding. In that short period of time, party membership had grown, comprising mainly young people radicalised by the Vietnam War and hostile to the Liberal government. Soon after winning office, Whitlam withdrew troops from Vietnam, ended conscription and began to implement a program of limited reforms, reinforcing illusions in the ALP. Right at the point where the SLL needed to deepen its orientation to the working class on the basis of a struggle against the Labor and trade union bureaucracy, a significant number of members began leaving the party before their political education had really begun.
188. The development of the political struggle for Trotskyism within the Australian working class required the strengthening of the political and theoretical foundations of the SLL. That was only possible through the closest collaboration with the leadership of the ICFI in Britain. But the British Trotskyists were turning away from their responsibility to train and educate an international cadre. In November 1973 they founded the Workers Revolutionary Party (WRP) on a series of tactical demands, centring on the ousting of the Tories and the return of a Labour government. The International Committee was excluded from the discussions leading up to the founding congress, and the WRP’s program contained neither a reference to the perspective of world socialist revolution nor to the lessons of the struggle against Pabloism.
189. In 1974, a serious crisis erupted in the WRP after the British miners brought down the Heath Tory government, and a minority Labour government came to power. Because the party had been founded largely on appeals to anti-Tory sentiment, not on the historic struggle against Pabloism and a political and historical clarification of the class nature of social democracy, the new situation confronted the WRP leadership with the haemorrhaging of hundreds of members and, most significantly, the emergence of an unprincipled, right-wing, anti-party faction. Led by Alan Thornett, a central committee member and leading trade unionist in the car industry, the faction opposed the party’s renewed efforts, following Labour’s election, to emphasise its Trotskyist perspective and its opposition to social democracy. Instead of educating the membership through a patient exposure of Thornett’s centrist politics, Healy and the WRP leadership immediately cut off all political discussion and expelled the Thornett group, losing many more members and its most important faction in basic industry. The end result of this politically irresponsible act was to “tilt the social base of the party toward the middle class” and away from its formerly powerful base in the working class.
190. In its 1986 statement How the WRP Betrayed Trotskyism 1973–85 the IC explained: “Regardless of Thornett’s aims, intentions and orientation, the emergence of his faction was bound up with crucial problems of the development of the WRP and the British working class. The coming to power of the Labour Party in March 1974 and its re-election in October 1974 placed immense political pressures on the Marxist vanguard and required theoretical clarity, without which tactical resourcefulness inevitably degenerates into opportunist scheming. In this sense, the struggle with Thornett was the first great test of the WRP leadership’s ability to fight the Social Democracy.”
191. The WRP’s failure to pass this test had profound implications, not only for the WRP, but for the young sections in Germany and Australia, which, like the British section, also confronted the political challenges posed by the coming to power of social democratic governments. As it turned out, Slaughter’s political advice and assistance in 1972 was to be the SLL-WRP’s last positive intervention in Australia. In 1975, under conditions of the most serious and—potentially revolutionary—political crisis in Australian history, the WRP’s orientation served only to politically confuse and disorient the Australian SLL. In a resolution on the tasks and perspectives of the SLL issued on October 5, 1986, in the aftermath of the split with the WRP, the IC noted: “On the crucial question of Social Democracy, central to the work of the Australian section, the SLL was forced to pay a heavy price for the political degeneration of the WRP. 1975, the year of the Canberra coup, marked the beginning of the WRP’s unchecked repudiation of all the historical lessons which had traditionally guided the Trotskyist movement in the elaboration of its tactics in the struggle against Social Democracy.”
192. In early 1974, just over one year after the Whitlam government had come to power, and following its failure to suppress the powerful wages movement, sections of the ruling class moved to oust it from office. Acceding to the Liberals’ demands to call an election, Whitlam was nevertheless returned to office in May 1974. By 1975, the inflationary spiral had led to a full-blown recession, deepening the country’s economic and political crisis. The Labor government responded by moving further to the right. In June, “left” treasurer Jim Cairns told a Victorian ALP conference: “Despite our understandable and justified aspiration for a better society we must operate for now within the system. The system we live in has only one way to deal with inflation quickly. This is to squeeze money out of people by cutting government expenditure and the money supply through the banks so that unemployment becomes so big that it will force workers to accept real wage reductions.” Whitlam took his cue from Cairns and declared that the government would not tolerate wage rises like those of the year before.
193. In July 1975, in a further attempt to appease the government’s big business critics, Whitlam ousted two key “left” ministers from the cabinet—Labour Minister Clyde Cameron and treasurer Cairns. Neither man opposed his sacking, nor did any trade union or Labor “left”. Moreover, they made no calls for the mobilisation of rank and file workers against Whitlam’s rightward lurch. The passivity of the “lefts” gave confidence to the Liberal Party, and its co-conspirators, to step up the government’s destabilisation. Upon his elevation to the leadership of the Liberal Party in February 1975, Malcolm Fraser had made clear the Opposition would block Supply (the appropriation of funds to pay for budget expenditure) in the Senate if there were sufficiently “reprehensible circumstances.” By the middle of the year a series of “scandals”, centring on the government’s attempt to raise foreign loans, had been organised, with the collaboration of British and American intelligence agencies, to create precisely those circumstances.
194. In the same month, July 1975, the Wilson Labour government in Britain moved to introduce laws restricting wage rises for workers. In response, the WRP changed its political line. Instead of launching a campaign throughout the workers’ movement for the defeat of the pay legislation by ousting the right-wingers who had introduced it, the WRP declared: “The only way to unite the whole movement is to force their resignation (Wilson and the right-wing) and make the Labour Party seek a fresh mandate to go to the country in a general election and defeat the Tories.” As the IC later explained: “The resolution signified a fundamental programmatic break with the proletarian orientation for which the British Trotskyists had fought for decades. To call for the bringing down of a Labour government, under conditions in which the revolutionary party had not yet won the allegiance of any significant section of the working class and in which the only alternative to Labour was a Tory government which the working class had brought down little more than a year before, was the height of adventurism. At the very point when the Labour Party was being compelled to turn openly against the working class, creating the conditions for a powerful intervention within its mass organisations, the WRP presented an impossible ultimatum. At a very early stage of this confrontation, the WRP proposed to pre-empt the struggle within the working class organisations with a campaign that would place the fate of the Labour Party in the hands of the national electorate.”
195. Having pre-empted any struggle against the right-wing Labour leadership in Britain, the WRP showed no interest in the complex political situation that was rapidly developing in Australia, nor in the approach the SLL should take. The most critical task facing the SLL was to deepen its analysis of the crisis, disclose the treacherous accommodation of Whitlam to the bourgeoisie and the state’s preparations to oust his government, and, above all, expose the role of the Labor and trade union “lefts”, backed by the Communist Party Stalinists, in refusing to lift a finger against Whitlam and the Labor right wing. Only in this way could the working class be politically armed to meet the intervention of the capitalist state. Instead, during a visit to Australia in June 1975, Healy sought to turn the SLL towards the middle-class radical milieu from which it had broken three years before. How different from his role eleven years earlier, when he visited Sri Lanka in the midst of the LSSP betrayal, denouncing it publicly and exposing its roots in the politics of Pabloism, and seeking to rally genuine Trotskyists to the International Committee.
196. The political crisis rapidly developed and on October 16, 1975 the Liberals moved to oust the Labor government by blocking Supply in the Senate and denying it the ability to function. The move opened the way for the governor-general (the head of state and the Queen’s representative) to dismiss the government. The Liberals’ actions were met with the eruption of a mass political movement of workers, students, youth and professional people who sought to block the Liberals’ attempted coup. At the same time, the entire Labor and trade union leadership, together with the Communist Party Stalinists, worked to politically stifle this movement and channel it behind Whitlam and the Labor leadership.
197. Less than two weeks before his sacking, Whitlam had delivered a speech that revealed his central preoccupation: to prevent the working class entering into a political struggle outside the parameters of the parliamentary system. Explaining that his entire leadership had been devoted to convincing the Labor movement of the importance of reform through parliament, he declared: “I would not wish on any future leader of the Australian Labor Party the task of having to harness radical forces to the restraints and constraints of the parliamentary system if I were now to succumb in the present crisis.”
198. When Whitlam was sacked on November 11, he did everything he could to assist the governor-general’s coup. The Labor prime minister did not oppose his own sacking. Instead, Labor MPs ensured the passage of Supply to the “caretaker” Fraser government that Governor-General Sir John Kerr had installed. The working class, however, responded to the coup with a series of mass walkouts and protests. The trade union bureaucracy, under the leadership of then ACTU president Bob Hawke, worked to block mounting demands for a general strike. Asked for his reaction to the sacking and to calls for industrial action, Hawke replied: “Of course I am upset but it is not just a question of a Labor government appearing to fall. My concern is about the future of this country. What has happened today could unleash forces in this country the like of which we have never seen. We are on the edge of something quite terrible and it is important that the Australian people respond to leadership.” Speaking to a mass meeting of shop stewards just days before the coup, Hawke had disclosed the fundamental role of the Labor and trade union apparatus: “The capitalist system began to break apart at the seams in the 1970s. So we came to power in 1972 to save the system.”
199. The intensity of the political crisis and the potentially revolutionary implications of the coup were underscored by former Liberal leader Billy Snedden. Speaking on his retirement in 1983, he said: “[T]here were some events on that day in which we were so lucky it was unreal. If they [the Senate and the House of Representatives] had been sitting when the Governor-General tried to dissolve, we would have got the troops in to get them out of the House. … We were lucky that day … there was a very real fear of insurrection that day.”
200. The petty-bourgeois radical tendencies worked to downplay the significance of the political crisis, thereby providing crucial support for the Labor and trade union leadership. The SWP Pabloites opposed the call for a general strike on the grounds that it was “too advanced”. Exaggerating the strength of the bourgeoisie, the Spartacists described the coup as a “slight stretching of bourgeois legality”, and declared that a general strike faced “an overwhelming likelihood of defeat.” In the aftermath of the coup, the Pabloites set about creating the myth that the Whitlam government had been sacked because it was too susceptible to pressure from the working class for reforms.
201. The Whitlam government was not sacked because it had accommodated to the demands of the working class. On the contrary, it had made clear from the outset which class it would serve. But there were fears in ruling circles that the Labor government was incapable of suppressing the opposition of the working class to its program, and that this would lead to a head-on clash. After all, the stability of capitalist rule in Australia faces no more dangerous threat than a collision between the working class and its Labor leadership—historically, the most important political prop of the bourgeoisie. The coup was a pre-emptive strike to prevent such a conflict.
202. Throughout the political crisis of 1975, the SLL fought to expose the role of the Labor and trade union leadership and develop an independent political perspective for the working class. Following the rapid swing to the right by the Labor leadership from mid-1975, the SLL called for the ousting of the Whitlam leadership and the convening of union and Labor Party conferences, open to the rank and file, to adopt a socialist program. However, in line with the orientation of the WRP, these policies were linked to the call for a fresh election. In other words, a titanic political struggle within the labour movement for a socialist program and the purging of the existing leadership should culminate with a stamp of approval from the national electorate at the ballot box.
203. With the decision of the Liberals to block Supply, on the demand that Whitlam go to the polls, the SLL dropped its call for a general election. Instead, the focus of its agitation switched to the fight for a general strike to oppose the attempts of the Liberals and the capitalist state to oust the government. It was absolutely correct to raise the necessity for an independent intervention by the working class into the political crisis. But that intervention could only go forward to the extent that the most advanced and politically conscious workers understood that the chief danger came not from the Liberal Party, the governor-general or even the state apparatus, but from the Labor and trade union leadership, which had created the conditions for the coup. It was here that the political shift of the WRP played such a damaging role. At the heart of its orientation was the development of tactical opportunism—the elevation of tactics above strategic conceptions. In the context of the Canberra coup, that meant that the SLL was preoccupied with the search for a correct tactic that would resolve the problems confronting the working class. In fact, no tactic or slogan could play such a role. The fundamental task of the SLL was to clarify the role of social democracy, not only in Australia but internationally, and win the most advanced layers of the working class to a new, socialist and internationalist, political perspective. The paramount question was to develop an understanding, within the vanguard of the working class, of the treacherous role being played by its leadership. Without that the working class remained politically trapped.
204. Powerful pressures were exerted on the SLL to downplay the political importance of such a struggle right at the point where it became the most critical factor in the situation. These pressures were generated by the political crisis itself, as broad masses entered into struggle. In the preceding period, the SLL’s work had developed within a more limited framework. After the coup, millions of people, who had been either indifferent to the political situation or had followed the crisis at a distance, now became actively involved. Within the most politically conscious layers of the workers’ movement, a growing disquiet had been developing, followed by outright hostility, towards the right-wing Labor leadership and a deepening understanding of its role as the bourgeoisie’s servant. But following the November 11 coup, such sentiments were outweighed by the outlook of the new forces coming onto the political scene. They were much less critical of Whitlam, while Hawke enjoyed a wide level of support—having been assiduously promoted as a “left” and champion of the workers’ movement, above all by the Communist Party Stalinists. The newly politicised layers believed that the Whitlam government had been sacked because of its reforms. The situation was rapidly changing. Millions of people, previously relatively politically inactive, were now striving to find a way to defend a government and its leadership that were being attacked by the most right-wing forces in society. It became increasingly difficult to fight for a political line insisting that the only way forward for the working class was to conduct a political struggle against that Labor leadership.
205. The betrayals of the Labor and trade union leaderships ensured the victory of the Liberals, under the leadership of Malcolm Fraser, at the December 10 federal elections. Once it became clear that independent action by the working class was not going to take place and that the coup had succeeded, more than a million votes in the middle class swung behind the Liberals, handing them a large parliamentary majority. Later, in order to cover their own counter-revolutionary role in facilitating the coup, and their organic hostility to the political independence of the working class, the Stalinists of the CPA claimed that Fraser’s victory demonstrated that Australia was a “conservative” society.
206. The enormous pressures brought to bear on the SLL as a result of the political upheavals of 1975 could only have been countered on the basis of a global perspective locating the objective international significance of the events in Australia and grounding the SLL on the historical experiences of the Trotskyist movement with social democracy. But the WRP was increasingly working without an international perspective. Such political work had virtually come to a halt following the collapse of the Bretton Woods Agreement in August 1971. The shift in the orientation of the WRP deprived the SLL of vital international collaboration. In the events leading up to the coup, Healy had sought to disorient the SLL and when the crisis of October–November erupted, the WRP leaders made no move to initiate discussion on the Australian situation. There were no letters, no request for information or analysis, not even a telephone call. The only comment offered by the WRP leadership was to criticise a later assessment by the SLL that the coup represented the “beginning of the end of bourgeois democracy” on the grounds that parliamentary elections were still being held. While the coup was a major strategic experience for the Australian and international working class, the nationalist, rightward turn of the WRP leadership meant that its lessons were neither discussed nor assimilated. That could only take place in the aftermath of the split in the International Committee of 1985–86.